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LONDON (Reuters) - European fund managers showed an increasing home bias this month, allocating their highest weighting to euro zone equities in 18 months as economic data indicated signs of recovery in the bloc.

Fund managers also matched last month's level of allocations to euro zone bonds, which were the highest since March 2012, a monthly Reuters asset allocation poll showed.

Signs that the currency bloc is finally recovering from recession have boosted appetite for euro zone assets, with Germany, the bloc's largest economy, enjoying its fastest rate of expansion in more than a year in the second quarter.

Concerns about the high debt burdens of some euro zone members are not as acute as earlier in the year and that has also supported euro zone bond prices and allocation levels.

The survey of 20 asset managers in Europe, excluding Britain, showed equities accounted for 47.4 percent of respondents' global balanced portfolios on average in August, up from 47.1 percent in July. <EUR/ASSET>

Reflecting some lack of conviction, however, the fund managers kept 8.3 percent of their global balanced portfolios in cash, the highest levels in a year.

Expectations that the U.S. Federal Reserve will soon start to scale back its bond-buying programme have led investors to cut their exposure to high-yielding emerging market assets in Europe and Latin America.

But uncertainty remains about plans by the Fed and other developed central banks.

"Any central banks' miscalculation regarding the pace for unwinding their unconventional policies remains one of the greatest risks to our global balanced portfolio strategy," said Jean Medecin, member of the investment committee of Carmignac Gestion in Paris.

The poll was conducted between August 14 and 28, when world stocks as measured by MSCI .MIWD00000PUS fell 4 percent on caution over the Fed's bond-buying plans and on concern about the possibility of U.S.-led military action on Syria.

In the fixed income market, hunger for yield was still strong, with several fund managers saying they were overweight in corporate debt.